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The ASX enjoyed a strong rebound today, bouncing sharply as investors latched onto two positives at once. Brent crude rolled over in Asian trade after the US President purportedly presented Iran with a 15-point plan to end the conflict, helping to calm nerves. At the same time, the February CPI print came in a touch softer than feared, giving the market some confidence that domestic inflation pressures are easing.
After the volatility of recent weeks, the market was clearly primed for some good news, and it got just enough to spark a relief rally that held up through the day. Buyers were back in the mix, particularly in the more beaten-up parts of the market, though the broader backdrop remains fragile and the path from here will still be dictated by headlines out of the Middle East.
- ASX 200: 8,534 / +154pts / +1.85%
- AUD/USD: 0.6974 / flat / −0.31%
- Best sectors: Materials +4.41%, Industrials +1.89%, Healthcare +1.71%
- Worst sectors: Energy −2.33%, Consumer Staples −0.12%, Utilities −0.06%
- February CPI came out at 11:30am and was softer than expected at 3.7% vs 3.8% expected by the market, prompting traders to dial back expectations for further rate hikes. The Trimmed Mean figure, which the RBA focuses on, came in at 3.3% vs consensus of 3.4%.
- The biggest moves came from the materials sector, which surged as gold and base metals rebounded. Newmont (NEM) +8.93%, Northern Star (NST) +7.00% and Genesis Minerals (GMD) +6.82% all rallied.
- Large-cap miners also joined the rally, with Rio Tinto (RIO) +1.59% rising after news the company would receive $2bn in government support tied to securing the future of its Boyne aluminium smelter in Queensland, linked to more than $7bn of clean energy investment.
- Retailers were also bid as risk appetite returned – Eagers Automotive (APE) +5.55% led the gains while JB Hi-Fi (JBH) +2.61% added to the sector’s strength.
- Energy stocks moved the other way as crude prices retreated – Woodside Energy (WDS) −3.20%, Santos (STO) −2.30% and Karoon Energy (KAR) −7.28% all fell as oil slipped.
- Alliance Aviation (AQZ) +27.36% surged after reassuring investors that the spike in fuel prices tied to the Iran conflict has minimal direct impact on earnings, given fuel costs are largely passed through to customers under its contract arrangements.
- Worley (WOR) +2.82% edged higher after saying it had put safety and operational measures in place across its Middle East operations, which account for around 10% of group revenue.
- Pepper Money (PPM) +5.36% gained, though was off ~5% early, after walking away from takeover talks with Challenger, saying the $2.25 a share proposal was not reasonably capable of being implemented.
- Amplitude Energy (AEL) -36.7% was hit hard after confirming its Isabella gas discovery in the Otway Basin was non-commercial, with the well now set to be plugged and abandoned.
- 4DMedical (4DX) +34.56% rallied strongly on news it had secured deployment of its product at the Mayo Clinic, adding to the growing list of premier medical and research institutions now using its lung imaging technology.
- DroneShield (DRO) +19.33% was the session’s best performer in the ASX 200, surging strongly as defence names rebounded.
- Gold: Rose US$75 in our session to $4552/oz around our close
- Oil: Down -4.7% to $100/bbl
- Iron ore: Fell in our trade to $104.80/mt
- Futures: FTSE +0.72%, S&P 500 E-Mini +0.78%, Dow E-Mini +0.84%
